Google Play widened its lead over iOS in worldwide downloads; however, iOS maintained its lead in worldwide consumer spend.
The first quarter of 2017 saw record levels of worldwide app downloads and consumer spend. iOS and Google Play downloads grew 15% year over year — to nearly 25 billion worldwide. This is an incredible feat since this number only reflects new downloads and is not inclusive of re-installs or cumulative downloads from past quarters.
Gross consumer spend also grew at an impressive 45% year over year in Q1 2017 to well over $15 billion across iOS and Google Play worldwide. This figure only partially represents how publishers can generate money through apps since it does not include revenue from m-commerce or in-app advertising.
The app market is soaring as consumers migrate more of their lives to mobile and pay for the ease, convenience and accessibility that apps offer.
Google Play Downloads Boom in Q1 2017
Google Play widened its lead over iOS to 135% for worldwide downloads in Q1 2017, up from a 100% lead back in Q1 2016. It saw both the greatest absolute growth and the fastest growth rate year over year out of the two stores. Google Play grew 20% year over year, fueled largely by growth in emerging markets like India and Indonesia.
India is still in the early stages of the App Market Maturity Cycle. The incredible rate of downloads the region is currently experiencing is the result of consumers trying out new apps before app habits form. Smartphone penetration in India is below 30%, which paints a rosy picture of long-term growth. As more consumers adopt smartphones, we expect India to continue to contribute significant download growth in the quarters to come.
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While Android devices dominate in India and drove Google Play downloads in Q1, India was also a chief contributor to growth in iOS downloads, second only to China. China remains a vital market for the iOS App Store, and as downloads continue to grow, consumer spend follows.
Overall, the iOS App Store saw a healthy growth rate of 5% year over year in Q1 2017; however, it’s when looking at consumer spend that the App Store’s leadership really comes into focus.
iOS Consumer Spend Grew 45% YoY in Q1 2017
iOS increased its lead to 100% in consumer spend over Google Play in Q1 2017, up from 90% in Q1 2016. It saw impressive consumer spend growth of 45% year over year in Q1 2017 along with the greatest absolute gains in consumer spend out of the two stores. Given China’s rise to the #1 country by iOS consumer spend, it’s no surprise that China was a chief contributor of growth. China saw both the greatest absolute gains in iOS consumer spend and the largest growth in market share of worldwide iOS consumer spend year over year. Our App Store Forecast predicts that China will remain the largest single market for app store spend through 2021 and is poised to hold its title as the largest single market for iOS consumer spend in the years to come.
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Google Play Consumer Spend Picked up Speed in Q1 2017
Google Play also saw strong growth — consumer spend grew 40% year over year. While emerging markets fueled much of the download growth, mature markets were the biggest contributors to growth in consumer spend. South Korea and the US saw the greatest growth in market share of worldwide Google Play consumer spend, but Japan and the US saw the largest absolute growth year over year.
While the largest contributors to growth in consumer spend on both Google Play and iOS have come from Asia and the Americas, Europe plays an integral role in driving consumer spend on both stores. The United Kingdom, Germany and France represent three of the top 10 markets for both Google Play and iOS consumer spend in Q1 2017, a trend which has held true for the past five years.
Q1 2017 saw record levels of downloads and consumer spend in the app economy, with particularly strong growth in consumer spend across both stores. With app stores showing undoubtedly healthy growth, one thing is certain: The app economy is nowhere near peaking. Apps are an integral part of consumers lives across the world. Businesses need to adapt to this mobile-first world or be left behind in this booming economy.
COMMENTARY: According to a new App Annie report released on March 29, Apple will lose its lead over Android in terms of revenue generated by mobile apps this year. However, the firm’s estimate is based on including third-party Android app stores in its forecast, not just Google Play. When the Apple App Store is pitted against Google Play alone, Apple is expected to maintain its lead through 2021, the report says.
App Annie is predicting worldwide mobile app downloads to surpass 352 billion in 2021, with gross consumer spend across all the app stores to surpass $139 billion.
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The iOS App Store will account for a large chunk of that spend, as it’s expected to generate over $60 billion in 2021. Google Play will generate $42 billion, and third-party stores, $36 billion.
Those third-party stores – which include the Android app marketplaces offers by Tencent, Baidu, Xiaomi, Huawei, and others – accounted for $10 billion in revenue last year, and will grow to $20 billion in 2017, the report estimates.
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The market for Android apps is growing thanks in large part to mobile adoption in China as well as other emerging markets, particularly Mexico, Brazil, and Indonesia.
This will impact app downloads, too. Android downloads from both Google Play and elsewhere will at an annualized rate of 23 percent to 299.9 billion by 2012.
App downloads are more evenly distributed across countries around the world, but revenue is another matter, App Annie also found.
According to its data, the top five countries by downloads – China, India, U.S., Brazil, and Indonesia – accounted for 54 percent of the downloads last year, and this won’t change much through 2021.
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However, the top countries by revenue – China, U.S., Japan, South Korea, and U.K. – accounted for 75 percent of app store revenue in 2016. This is expected to grow to 85 percent by 2021.
The firm chalked up this shift to increased spending on games and subscriptions from existing smartphone users in mature markets like the U.S., Japan, and South Korea, but especially the maturing market that is China.
China, because of its vast population and growing middle class, still plays a key role when it comes to app store revenues, but its market is maturing, the report notes. The majority of Chinese app users are expected to settle into patterns of habitual use by 2021, which will allow revenue growth to be sustained even though downloads may slow.
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Downloads in China will grow at an annualized rate of 19 percent from 2016 to 2021, while consumer spend will grow 24 percent to $56.5 billion. In larger cities, much of the smartphone market in China is already saturated, meaning a lot of growth will come from other regions across the country.
India, on the other hand, is still in the early stages of the app market maturity cycle, and will see significant download and revenue growth through 2021. Downloads will grow 28 percent to nearly 23 billion by 2021, and app store spend will grow an annualized rate of 75 percent to $2.1 billion.
Despite India’s growth, consumer spend will be lower in the region because of a variety of factors, including more limited purchasing power and a culture that focuses more on saving versus spending on games and entertainment, App Annie says. It suggests that app developers targeting India consider other revenue models, like advertising.
Courtesy of an article dated April 26, 2017 appearing in App Annie and an article dated March 29, 2017 appearing in Tech Crunch
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